Caravans required

Claim for capital allowances on the purchase of caravans

The taxpayer and his wife were employed by the Caravan Club as assistant wardens at various locations. They were required to be on site 24 hours a day and although the club would have provided accommodation they used their own caravans. The taxpayer claimed capital allowances on the purchase of two caravans. This was on the basis that he carried on a qualifying activity and owned them for that purpose.

HMRC said plant and machinery allowances were due only if the caravan was ‘necessarily provided for use in the performance of the duties of employment or office’ (CAA 2001 s 15(1)(i)). It was not enough that it was relevant to the duties.

The First-tier Tribunal referred to the functional test in Benson v Yard Arm Club [1979] STC 266. The judge asked whether the caravan was ‘something by means of...